Andrew Caspersen Pleads Guilty In Manhattan Federal Court To Defrauding Investors Of Over $38 Million And Misappropriating Over $8 Million From His Former Employer

  Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ANDREW CASPERSEN pled guilty to defrauding investors of over $38 million and misappropriating over $8 million from his former employer.  CASPERSEN pled guilty to one count of securities fraud and one count of wire fraud before U.S. District Judge Jed S. Rakoff. 

Manhattan U.S. Attorney Preet Bharara stated:  “Andrew Caspersen’s guilty plea today closes a sad chapter in a tale of deception and betrayal.  Parlaying his privileged background, Caspersen concocted a wild fraud scheme that involved made-up private equity ventures, fake email addresses, and fictional financiers.  Through a litany of lies, Caspersen took millions from unwitting investors, including some of his own family and friends.”

According to allegations contained in the Information filed against CASPERSEN and statements made in related court filings and proceedings:

The Scheme to Defraud Investors

Beginning in November 2014 and continuing until his arrest in March 2016, CASPERSEN engaged in a Ponzi-like scheme to defraud investors, including his close friends, family members, and college classmates, by falsely claiming that their funds would be used to make secured loans to private equity firms and would thereby earn an annual rate of return of 15 to 20 percent.  In total, CASPERSEN attempted to defraud more than a dozen investors of nearly $150 million.  As a result of the false and fraudulent representations made by CASPERSEN, investors wired a total of approximately $38.5 million to shell company bank accounts controlled by CASPERSEN.  In truth and in fact, CASPERSEN never used investor funds to make the secured loans that had been promised.  Instead, CASPESEN used investor funds for purposes that investors had not authorized, including to make securities trades in his own brokerage account and to make periodic interest payments to earlier investors.

In order to carry out his scheme to defraud investors, CASPERSEN incorporated entities with names closely resembling those of legitimate private equity funds (the “Legitimate Funds”).  However, the entities incorporated by CASPERSEN (the “Fake Funds”) were merely shell companies created by CASPERSEN solely for the purpose of perpetrating his fraud scheme, and were in no way affiliated with or authorized by the Legitimate Funds.  CASPERSEN opened and controlled bank accounts for each of the Fake Funds (the “Fake Fund Accounts”).

In soliciting investments in the Fake Funds, CASPERSEN made the following false representations to investors, among others: in recognition for his prior work with Park Hill Group, CASPERSEN had been offered a “friends and family” investment allocation in a security that was allegedly offered by a private equity firm; CASPERSEN was personally investing in the security, and offering it to his family and a limited number of friends; the investment was a credit facility secured by a portfolio of assets owned by one of the Legitimate Funds; the investor would receive quarterly interest payments, ranging from 15 to 20 percent; the investment was practically risk-free, as the loaned funds would remain in a bank account; the investor could withdraw the principal at any time with 90 days’ notice; and investor funds should be wired to one of the Fake Fund Accounts.  The purported involvement of the Legitimate Funds was an attractive selling point for investors.   

As the scheme evolved, CASPERSEN also made additional misrepresentations in soliciting investors in connection with a purported investment opportunity in one of the Fake Funds CASPERSEN had created (“Fake Firm-5 Fund”) to resemble one of the Legitimate Funds (“Firm-5 Fund”).  CASPERSEN had been employed at a multinational firm as an investment principal from 2003 through 2012 (“Firm-1”).  According to CASPERSEN’s false statements to investors, Firm-1 wanted to purchase secondary ownership interests in Firm-5 Fund.  Due to uncertainty that Firm-1 could buy out all the original investors, Park Hill Group offered to make a loan to Firm-1, and Firm-1 agreed to take a loan from Park Hill Group.  CASPERSEN and Park Hill Group were working on behalf of Firm-1 to solicit investors for the loan, but, at some point after Firm-1 agreed to take the loan, it transpired that Firm-1 did not need the loan in order to purchase the secondary private equity interests.  However, because Firm-1 had already agreed to the loan, Firm-1 was obligated to pay interest on the loan.  CASPERSEN told potential investors that the loan was risk-free, as it was collateralized by the assets of Firm-1.  As with the earlier solicitations in the Fake Funds, investors were similarly misled by the purported involvement of the legitimate Firm-5 Fund in this investment.

To carry out the scheme, CASPERSEN registered a domain name and created a fake email address to make it appear that a “John Nelson” from Firm-1 was communicating with investors. CASPERSEN obtained recent quarterly and annual reports for the Legitimate Funds, and sent such reports to prospective investors to induce them into believing that their investments would be secured by the assets of the Legitimate Funds, when in fact they were not.  CASPERSEN also drafted promissory notes between investors and the Fake Funds, in which CASPERSEN made one or more of the following misrepresentations, among others: the Fake Fund would pay the investor his or her principal “in immediately available funds” together with interest on the unpaid principal; the interest on the outstanding unpaid balance would accrue at an annual rate of 15 to 20 percent; interest would be paid quarterly; upon 90 days’ notice to the Fake Fund, the investor may redeem his or her principal; and the Fake Fund “shall maintain cash or cash equivalents in an amount equal to or greater than” the total of the outstanding principal and accrued but unpaid interest.

In connection with the scheme, CASPERSEN received approximately 18 payments, in a total amount of approximately $38.5 million, from more than 10 individuals and entities for investments in the Fake Funds.  Notwithstanding CASPERSEN’s statements to the contrary, CASPERSEN never used any investor funds to make any loan to any entity, or otherwise invest in any fund or investment vehicle associated with any private equity fund.  Rather, CASPERSEN operated a Ponzi-like scheme in which he misappropriated investor funds from the Fake Fund Accounts and converted them to his own use and use by others, including by using investor funds to meet CASPERSEN’s periodic interest payment commitments to earlier investors. CASPERSEN transferred the funds he received from investors into his personal brokerage accounts, and used the funds to execute securities trades for his own benefit.  Specifically, CASPERSEN traded heavily in options, including options based on the Standard & Poor’s Depository Receipts S&P 500, an exchange-traded fund based on the S&P 500 with ticker symbol “SPY,” and options based on PowerShares QQQ, an exchange-traded fund based on the Nasdaq 100 Index.  For example, CASPERSEN’s trades of SPY options with November 2015 expiration dates caused approximately $14.5 million in losses.  By mid-February 2016, as a result of CASPERSEN’s trading activity, his brokerage account contained approximately $112.8 million in cash, an amount which would have been more than sufficient for CASPSERSEN to repay all of his investors.  Rather than repay his investors, however, CASPERSEN continued trading in options based on the performance of the S&P 500 Index.  From February 11, 2016, through March 9, 2016, CASPERSEN lost approximately $108.2 million in options trading.

The Scheme to Divert Funds from the Park Hill Group

From January 2013 through March 2016, CASPERSEN was employed in the secondary advisory group at Park Hill Group.  In July 2015, CASPERSEN opened a bank account under the name “PHG Operating LLC,” which was controlled by CASPERSEN for his own benefit and was unknown to Park Hill Group (the “Fake PHG Account”).

In September 2015, following instructions provided by CASPERSEN, Firm-5 sent a wire transfer in the amount of $8,137,453, representing payment for legitimate work that Park Hill Group had done, to the Fake PHG Account, believing it to be a legitimate account used by Park Hill Group.  On or about the same day, CASPERSEN transferred $8 million from the Fake PHG Account to his brokerage account, in order to execute trades in securities for his own benefit, largely in SPY options.  In November 2015, CASPERSEN transferred approximately $8.1 million to an account belonging to Park Hill Group, thereby replacing the payment from Firm-5 that he had misappropriated.  The $8.1 million transfer was traceable to funds that CASPERSEN had obtained by defrauding investors as described above.  Also in the fall of 2015, CASPERSEN engaged in a similar fraud with respect to a $762,267 payment that he misappropriated from Park Hill Group, and later repaid using the proceeds of his securities fraud scheme.

CASPERSEN, 39, pled guilty to one count of securities fraud and one count of wire fraud.  Each count carries a maximum term of 20 years in prison.  The maximum fine on these counts is $5 million, or twice the gross gain or loss from the offense.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

CASPERSEN’s sentencing is scheduled for November 2, 2016.

IDC LEADER JEFF KLEIN - Hidden Dangers in Day Care

STATEMENT FROM
INDEPENDENT DEMOCRATIC CONFERENCE LEADER JEFF KLEIN

Knowing children are safe while in day care will bring great relief to parents across this state. In November, I released an alarming investigation, "The Hidden Dangers in Day Care," exposing violation-ridden facilities. We've unfortunately seen cases where under providers' watches children were seriously injured and in nightmarish cases children have died. This is simply unacceptable. That's why I carried the torch in the Senate to increase transparency for our parents and crack down on bad actors. We unanimously passed this measure in the Senate. I also led the charge to place report cards on every day care in New York City, letting parents see vital information right at the door. This passed both houses and will soon be signed into law. I applaud Governor Cuomo for taking emergency action yesterday to ensure that children across this state are safe while in day care.

NYPD SEEKS INPUT ON PROPOSED BODY CAMERA POLICY

The NYPD wants input from the communities we serve on an important NYPD policy before it is finalized: our body camera policy.

 

The NYPD will be equipping 1,000 officers in 20 precincts throughout the city with body-worn cameras.  In partnership with the Policing Project at NYU School of Law, the NYPD is seeking input from the people who live, work or go to school in New York City into the policy that will govern the use of these cameras through an online questionnaire.

 

The questionnaire can be completed in minutes, is mobile-friendly, and can be submitted anonymously. It is designed to get community input on important policy issues, including the types of events that should be recorded and who should be allowed to see the body camera footage. The questionnaire may be found at www.nypdbodycameras.org. This website contains a summary of the proposed policy, the full draft of the proposed policy, and the confidential questionnaire. 

 

The site will remain open until July 31, 2016.  NYU will collect the responses and comments and provide them to the NYPD for the NYPD's consideration in drafting the final policy.

 

Please provide your input, and please forward this email to other members of your organization or community. The NYPD wants to hear what New Yorkers think.

THE COUNCIL OF THE CITY OF NEW YORK

OFFICE OF COUNCIL MEMBER 

JUMAANE D. WILLIAMS

Bronx Democratic County Committee Dinner - 1 Week Away!

Click on the program to make it larger, and for more information.

News from the BLACK, LATINO, AND ASIAN CAUCUS

BLACK, LATINO, AND ASIAN CAUCUS APPLAUDS ADOPTION OF FY’17 BUDGET

  The Members of the Black, Latino, and Asian Caucus celebrate the successful adoption of the FY 2017 budget, which represents the Council’s commitment to equity and support for all New Yorkers.

  New York City’s stature in the global arena is in large part due to its wonderful level of diversity, with more than two-thirds of New Yorkers identifying as Black, Latino, or Asian/Pacific Islander. As the largest Caucus of the Council and the only Caucus dedicated to uplifting communities of color, the BLAC takes this responsibility very seriously, and is proud of the thousands of working hours invested by the Council to contribute to this mission. We especially thank Speaker Mark-Viverito and Finance Chair Julissa Ferreras-Copeland, both proud BLAC Members, for their tireless work in championing fair and progressive funding choices for our great city.

   The Caucus’ top FY 17 priority was securing 60,000 slots for the Summer Youth Employment Program (SYEP) and 6,000 slots for year-round youth employment, as well as a commitment from the Administration to implement universal youth employment by 2019. The BLAC is pleased with the funding of the 60,000 summer job slots and the creation of a youth jobs task force to address the growing need for the program’s expansion.

  The BLAC also amplified the voices of thousands of students and education advocates by prioritizing the funding of the CUNY Merit-Based Scholarship program. The Council allocated over $17.3M for the scholarship program, helping to alleviate the financial burdens of many undergraduate students across the city.

   “Unemployment and educational inequality are two issues that affect far too many New Yorkers,” said Council Member Robert Cornegy, Co-Chair of the BLAC. “This year’s budget has secured $54.5 million for 60,000 slots in the Summer Youth Employment Program (SYEP), with an additional $1.5 Million allocated for career training and job readiness. After much advocacy, we kept our promise to CUNY students by securing $16.5 million for CUNY merit based scholarships. Also, the Council has allocated $32 million in total for youth services with $1 million for community education programs that supplement and complement classroom teaching for NYC students.”

   Other successful Caucus priorities include the NYCHA Family Reentry Pilot Program, anti- violence community programs, language access and adult literacy solutions, foreclosure prevention assistance. More details on the BLAC’s advocacy in the FY 17 budget can be found in the accompanying report.

  “The BLAC was instrumental in advocating for and securing funding in the FY17 budget for programs that will have significant impact in communities of color throughout the City. The funding for 60,000 SYEP slots, including 6,000 year-round slots, will ensure that youth have access to summer-jobs that will enhance job skills and training for future employment opportunities. Another important program, NYCHA’s Family Reentry Pilot Program, will continue receiving funds in order to keep families intact in public housing. These are real wins for all New Yorkers, and we’re proud of the role the BLAC played,” said Council Member Ritchie Torres, Co-Chair of the BLAC.

BLACK, LATINO, AND ASIAN CAUCUS STANDS AGAINST POLICE VIOLENCE IN BATON ROUGE

   The Members of the Black, Latino, and Asian Caucus extend their deepest condolences to the family of Alton Sterling, who was tragically killed yesterday by police in Baton Rouge, LA.

   Our national landscape is peppered with the bodies of countless unarmed people of color who are being routinely killed by police simply for “looking suspicious” or for engaging in everyday behavior that would otherwise not warrant such extreme and lethal responses by police. As members of our respective communities, many of us easily forget that police violence and misconduct are not unique to specific localities. Rather, it is undeniably clear that the use of excessive force by police is a systemic issue across our nation, and we cannot allow this to continue happening anywhere, because injustice in one community threatens justice in all communities. We stand in solidarity with the people of Baton Rouge during this difficult time, and pledge to continue fighting against all forms of police violence whenever and wherever they occur.

BLACK, LATINO, AND ASIAN CAUCUS DENOUNCES VIOLENT ACTS BY RECKLESS OFFICER

   The Members of the Black, Latino, and Asian Caucus are outraged at the reckless violence that took place over Independence Day weekend when Delrawn Small was needlessly killed by an NYPD officer’s unnecessary use of deadly force. Mr. Small was involved in an interaction with the off-duty officer and Mr. Small was unarmed. Nevertheless, he was gunned down in front of his family, including his infant daughter.

   The Caucus has long advocated for the use of a special prosecutor in cases like this one. We are cognizant of the fact that Attorney General Eric Schneiderman will have jurisdiction in this case. However, we have grave concerns. We believe it is grossly inappropriate that the NYPD take any part in the official investigation, especially in the collection and retention of evidence. As an entity that has demonstrated that it prioritizes personnel over process, the NYPD has repeatedly hidden behind the “blue shield” to protect bad officers and allow them to continue harming communities of color. Officer Wayne Isaacs has already been the subject of claims of racially- charged violence—exactly two years ago today, Isaacs was alleged to have used racist slurs while beating a civilian, for which the NYPD paid a $20,000 settlement in the resulting lawsuit. We are deeply disturbed that the NYPD goes to such great lengths—at taxpayers’ expense—to keep dangerous officers on the streets.

   Each time we fail to hold police accountable for their misconduct, New Yorkers lose more faith in a system they see as irreparably broken. Without trust in law enforcement, our city becomes more polarized and less confident in the government’s ability to protect its most vulnerable residents.

For Whom The Bell May Toll

  Rumors are that the U.S. Attorney will be if not already has knocked on a few doors in Bronx County.

    Nothing is official yet, but going back to the New York Times article of last year, my subsequent discussions with certain elected officials for my column 100 PERCENT about the Times article, and the recent arrest of a prominent union leader may have given authorities the final piece to the puzzle which may have some unexpected results in the world of Bronx politics. 

    I hope that I am wrong, but the Bronx could be in for a big surprise within the next 24 - 48 hours. 

Bronx Tax Preparer Pleads Guilty To 13 Counts Of Preparing And Filing False And Fraudulent Tax Returns

  Preet Bharara, the United States Attorney for the Southern District of New York, and Shantelle P. Kitchen, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), announced that CHRISTOPHER AHERN pled guilty today to a 13-count Information, charging him with preparing false and fraudulent income tax returns for his clients.  According to the Information, AHERN filed tax returns that fraudulently claimed more than $4.7 million in credits and expenses.  AHERN pled guilty today before United States District Judge Deborah A. Batts.   

Manhattan U.S. Attorney Preet Bharara said: “By repeatedly filing fraudulent tax returns for his clients, Christopher Ahern committed federal crimes and deprived the government of close to $5 million in taxes.  We remain committed to charging and convicting those who commit and facilitate tax fraud.”

IRS-CI Special Agent in Charge Shantelle P. Kitchen said: “Unscrupulous income tax return preparers hurt not only their clients, who are ultimately responsible for what is reported on their tax returns, but all law-abiding taxpayers, who have to shoulder an additional burden.  Accordingly, the investigation of unscrupulous preparers remains one of the top priorities for IRS-Criminal Investigation.  Today, Mr. Ahern is held accountable for his egregious practices.”

According to the allegations in the Information to which AHERN pled guilty, and statements made during his plea proceedings:

AHERN owned and operated a tax preparation business called Get My Refund Fast, located in the Bronx, New York.  From 2012 through 2013, AHERN’s business prepared, and submitted to the IRS, nearly 5,000 tax returns.  These tax returns were false and fraudulent in that they claimed education credits to which the clients were not entitled.  AHERN received more than $1.5 million in fees from his clients for preparing and filing the fraudulent returns.

AHERN, 40, of Little Neck, New York, pled guilty to 13 counts of making and presenting false, fictitious, and fraudulent claims to the United States, each of which carries a maximum sentence of five years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

AHERN is scheduled to be sentenced on November 1, 2016, at 11:00 a.m., before Judge Batts. 

JASA Van Cortlandt Senior Center - July 2016 Events

Please publicize the following July 2016 cultural events at JASA Van Cortlandt Senior Center.located at 3880 Sedgwick Avenue Bronx.

On Thurs. July 7^th, enjoy a delectable lunch followed by the lively rhythms of Michael Gaskin, pianist/singer, at 1:00 PM. He will perform patriotic songs as well as selections from the Great American songbook, ragtime, Latin and ethnic, show tunes and waltzes for listening, singing and dancing. Lunch menu: Breaded Sole Fish Fillet, or vegetable liver, cous cous, vegetable mix and fruit. Recommended Senior Meal Contribution: $2.00 and Senior Event Donation: $1.00 Refreshments will be served.Non-senior Meal Fee:$5.00 and Event Fee: $2.00 Contact JASA Van Cortlandt Senior Center office at 718-549-4700 for advance meal reservations.

The center will open on Sun. July 17^th. Lunch of sesame chicken, brown rice w/pigeon peas and beet salad will be served at 1:00 PM followed by entertainment at 2:00 PM. Recommended Senior Meal Contribution: $3.00 and Senior Event Donation: $2.00 Refreshments will be served. Non-senior Meal Fee: $5.00 and Event Fee: $3.00 Contact JASA Van Cortlandt Senior Center office at 718-549-4700 for advance meal reservations and program information. 

On Thurs. July 21st, singer Phyllis Schapiro will present a program of Latin, Brazilian and Jazz music at 1:00 PMfollowing lunch at12:15 PM. Lee Feldman, pianist/song writer, will accompany her. Phyllis currently performs at several NY jazz venues including Cleopatra's Needle and BarThalia at Symphony Space. Lunch menu: Tilapia Francaise or veggie burger, Cuban rice, Kale and fruit.  Recommended Senior Meal Contribution: $2.00 and Senior Event Donation: $1.00 Refreshments will be served. Non-senior Meal Fee: $5.00 and Event Fee: $2.00 Contact JASA Van Cortlandt Senior Center office at 718-549-4700 for advance meal reservations.

The Cynthia Sayer Trio will entertain at JASA Van Cortlandt's Volunteer Recognition event on Wed. July 27^th.Award-winning instrumentalist, vocalist and bandleader, Cynthia Sayer single-handedly re-popularized the 4-string banjo in jazz. Sayer is

celebrated as one of the top 4-string jazz banjoists in the world today. A multi-instrumentalist, Sayer's banjo, piano, ukulele and tenor guitar, playing can be heard on feature film and TV soundtracks.

Lunch of Salmon, Quinoa, California vegetables and fruit will be served at 12:00 noon followed by the Volunteer Recognition ceremony at 12:45 PM. The Cynthia Sayer trio will perform at 1:30 PM.Recommended Senior Meal Contribution: $3.00 and Senior Event Donation: $2.00 Refreshments will be served. Non-senior Meal Fee: $5.00 and Event Fee: $3.00 Contact JASA Van Cortlandt Senior Center office at 718-549-4700 for advance reservations.